History Lesson: The TARP Snow Job

Jan 10, 2012

RUSH: Well, the establishment Republicans are feeling the heat today. Everybody is hitting them by virtue of the fact that Romney is being hit. Romney is the establishment candidate, and everybody to one extent or another — except Santorum. Santorum’s taking it easy on the TARP aspect here. Santorum’s doing good cop to Newt’s bad cop when it comes to Romney. But Perry’s out there hitting it, and the media today is hitting Romney. Andrea Mitchell (NBC News, Washington) just speculated that Romney’s unforced errors may hurt him in New Hampshire. Now, the unforced errors are, “Gee, I love firing people,” and explaining profits and so forth. So we’re now in the middle of a debate over who is and who isn’t a real capitalist on the Republican side.

In that regard just a couple of thoughts here before we get to the audio sound bites and to your phone calls. Now, Romney supported TARP. In his book “No Apology,” Romney says that the TARP program “was intended to prevent a run on virtually every bank and financial institution in the country,” and he says “it did, in fact, keep our economy from total meltdown.” But he also, in the book, criticizes Obama’s Treasury secretary, “Little Timmy” Geithner, for using TARP as a slush fund. “Under Geithner the program was as poorly explained, poorly understood, poorly structured, poorly implemented as any legislation in recent memory,” Romney wrote.

His final word on the subject is it should be shut down. Now, I don’t think… You can’t have it both ways. You can’t say at the outset that it was there to save a virtual worldwide economic collapse — and then, after having said that, say it needs to be shut down. If TARP was successful as its proponents tell us, then why in Sam Hill is there an economic crisis in Europe? Because in addition to TARP, don’t forget that the Federal Reserve (and at the time nobody knew who) had lent or given $2 trillion, when TARP was $800 billion or close to one trillion, anyway. The Fed had given out, lent, whatever, $2 trillion and wouldn’t at the time tell us who got the money.

Now, here’s the way it was explained to us. George W. Bush was in the White House minding his own business — and the timing of this? How coincidental! Right as the thrust of the presidential campaign begins, right as we get into September and October and, lo and behold, the Treasury secretary, Paulson (a Chuck Schumer guy) goes to Bush and says, “We got 72 hours. If we don’t come up with $800 billion to bail out so-and-so and whoever, I can’t guarantee that the world economy won’t collapse.” What do you do if you’re president and your Treasury secretary comes and tells you that? What do you do?

You tell McCain about it and McCain says (impression), “All right, that’s… that’s serious. I’ll suspend my campaign. We’ll suspend the campaign and come to Washington and we’ll discuss it,” Obama goes too and then the news comes out that Obama took over the meeting in the White House! Bush convenes a meeting in his Cabinet Room, Obama comes in as a candidate and the story comes out that Obama took over the meeting and told everybody what was going on. He ran the meeting; nobody else knew what was going on. We got so shellacked. That was the biggest snow job, because after a year and a year and after went by, there was still $200 to $300 billion of unspent TARP money!

We’d also learned that a number of bank CEOs were commanded to appear in a locked room at the Treasury department, and Paulson made them take TARP money. He made them sign a piece of paper, even those who didn’t want it. The Wells Fargo CEO specifically said, “I don’t need it! My bank isn’t in trouble. I don’t want to have to take $50 billion,” or whatever it was they were forcing them to take. But Paulson made them all take it so that there would be the appearance of unity and system-wide problems — and the story is (and I happen to believe it) that Paulson told them he wasn’t letting them out of that room until they all signed.

They went in there at three o’clock in the afternoon and he didn’t let ’em out ’til six. Now, this was happening… You will remember that we stopped this for two weeks. They told us this has to be done in 24 hours and we delayed it for two weeks and in that process I remember all of us saying, “Wait a minute, what is the emergency? They said we had to do this in 72 hours or we’re cooked and it took two weeks to get it done.” Romney supported TARP. Santorum has been defending Romney over Bain. So has Ron Paul. Romney said that TARP should be shut down in December 2009. He praised it in March of 2009.

McCain was ahead in the polls on September 15th, 2008. The next day the financial crisis began. He was ahead by a couple of points in a couple of polls. It was like seven or eight points. McCain was up. Then this hit. And then we were told that the world economy would collapse if we didn’t do this, and all of our self-appointed geniuses who were trying to burn Newt at the stake a couple of weeks ago also supported TARP. It’s hard to find people who didn’t. I remember, I had to go to my hometown of Cape Girardeau, Missouri. A courthouse was being dedicated in the name of my grandfather, and one of the senators from Missouri there was, Kit Bond.

There was a dinner the night before the big ceremony to name the courthouse, dedicate it — and I was dubious about this, and I took him aside and I said, “Senator, is this really that bad?” “Oh, yeah! Oh, I’ll tell you, this is bad, Rush. Oh, yeah, yeah, this is horrible! Yeah, yeah. If we don’t do something about it, the future of the world’s at stake here!” Oh, okay. That’s what they were told, and these people bought it, and all it was… As we look back, all TARP was… There was certainly nothing capitalistic about it, and there was nothing capitalistic about the failure of the US economy. Capitalism was not in play. The subprime mortgage crisis had no relationship to capitalism. Capitalism would not permit the subprime mortgage crisis.

Capitalism does not permit the bailout of failed institution after failed institution, which is what TARP was. It was the biggest bailout of failed businesses in the history of this country, and it ended up being nothing more than a massive slush — and all of these people that are ripping into Romney, or whoever now, for being anti-capitalist and so forth, they didn’t care that TARP was anti-capitalist then. You know, all these people standing up and defending capitalism today didn’t care a whit about it when it was under siege with the subprime mortgage crisis and didn’t care a whit about it when TARP was proposed. TARP… What is a bailout?

A bailout is nothing more than wealth redistribution, and this was with taxpayer dollars. This is before Obama’s Porkulus! Total here, we’re looking at $1.8 trillion of slush funds, redistribution, that took place inside of six months, all set up by a phony economic crisis. Well, not phony, but what was phony was the severity of it in terms of if we didn’t do this the world economy collapses in 72 hours. That was bogus. So we bailed out big banks (in some cases banks that did not want to be bailed out) and sovereign wealth funds of foreign countries all on the backs of American taxpayers. They said it simply had to be done.

There was no time to stand up for things like principle. There was no time to worry about the moral hazards here. There was no time to even really dig deep and get the details and have us be told exactly why this needed to be done. No, no. There wasn’t time! It was a “crisis,” like every damn thing that has happened in this country the last four years! It has been a crisis that we cannot afford to wait on. TARP was the first one. The stimulus was the next one. Now, it goes without saying that in all the great investigations and fixes that followed, there has been no accountability of anybody who supported TARP. Not a single bit of it. Even after everything we said about TARP proved to be true. Even after it was used by Paulson and Geithner and Obama as a piggy bank to reward their friends.

Don’t for a minute think that Solyndra didn’t get some money from the TARP slush fund. Even after it ended up being used as a slush fund, even after it was used as a bailout so Paulson’s buddies could hold onto their houses in the Hamptons and so forth, we heard the argument, “It’s too big to fail, Mr. Limbaugh! We can’t let these things fail.” And that argument — “Too big to fail”– is still with us. “Too big to fail” is still something that we are hit with. So if disaster strikes again (and there’s Greece lurking out there and all of Europe); and if TARP was to fix this and prevent it, it hasn’t worked, has it? Because we’re being told the same thing now.

“Another crisis! The world economy is nearing collapse. Look what’s happening in Europe. The Germans are gonna have to bail out the Greeks — and, if they don’t, all hell is gonna break loose. The European Union, the euro? Too big to fail! We can’t allow this to happen.” So if Greece goes belly up and starts taking Europe down with it, guess what we’re gonna be told? “It’s too big to fail. We can’t let this happen.” So would Romney give us TARP 2? If Romney’s elected and the powers that be in the financial community walk into his office and tell him what they told Bush, “Mr. President, we’ve got 72 hours on here, and it’s really bad,” do you think we’d get TARP 2? I bet we would and all the same geniuses would be saying once again that this is something we just have to do.

“We don’t have time to think about it! We don’t have time to explain it. This is a crisis, it is an emergency. The world economy hangs in the balance!” It’s the same technique they use every time we need to extend the debt limit. Every time Obama wants to spend another trillion dollars, what are we told? “It’s crisis. It’s an emergency. We don’t have time for debate. We don’t have time for the usual congressional hearings. We don’t have time for the usual congressional testimonies. We don’t have time.” That’s why I said yesterday: “There are ideas, and there are people that are governed by them and people they’re inspired by them and people that get into politics because they want to advance ideas. But I’m telling you: At the same time, there are people who get into this strictly, solely to have access to all this money.”

It’s much easier than having to work for it, and the amounts that you can take and have allocated to you are far greater than what you can convince somebody to pay you. September 25th, 2008, Gingrich appeared on Fox News and said that the TARP legislation was socialism. He said that it should be defeated. That’s September 25th. On September 28th, Gingrich was on This Week on ABC. He said the question was not whether something needed to be done but whether needed to be TARP, whether needed to be done the next 48 hours. He then stated that he probably would reluctantly vote for it but… So everybody got captured by it. Then on October 1st of 2008 Gingrich wrote in Human Events that his solution would be to get rid of Secretary Paulson and to suspend the market to market rule, which would give Congress the breathing room to develop a plan to replace TARP and to reestablish trust with the American people.

So Gingrich was opposed to TARP. Romney — everybody — was for it. TARP is not capitalism! Romney, we’re being told, is the big capitalist. He supported the biggest bailout of banks and sovereign wealth funds. So my point is all of these allegations going back and forth about who’s a capitalist and who isn’t and who’s willing to defend it, the way it’s manifested itself now, is the establishment’s candidate is under assault for being a capitalist. His opponents are running around using the language of the left to attack him as a capitalist, and what are they gonna do? Are they gonna defend capitalism? Somebody better. Because whatever’s happening to Romney now, whoever our nominee is, you can quadruple this in terms of the allegations, what a Republican is: A conservative is, mean-spirited, loves big profits, loves big business, takes money from the poor and gives it to the bankers! All of that crap, it’s gonna be magnified twice what it is in the Republican primary right now. Meanwhile, in the Oval Office, we have a genuine redistributionist Marxist — and our establishment will not get anywhere near properly characterizing him that way.

BREAK TRANSCRIPT

RUSH: I do not want to be misunderstood here. You know my job is to communicate, to make the complex understandable. I just want you to understand, I’m not defending Bain. I’m not defending Romney. I’m not defending Newt. I’m not defending Santorum. I am defending capitalism and conservatism. And we are seeing, because this has happened, we are seeing in microcosm form the Obama campaign against our nominee in one regard. This is going to be — and it’s gonna be much more amplified than this is, for all the language Newt’s using and whoever the others are attacking Romney for profits and firing people, so forth, wait ’til the Democrats get hold of this. This is mild compared to what it’s gonna be, so it’s a good proving ground.

But this is the time to stand up for capitalism, to explain it when everybody’s paying attention. This is the time to define it, to illustrate it and explain what it means. This is the time to stand up and say, “If you allow people to pursue profit and earn profit, you never need TARP!” If you let people pursue profit, if you let people pursue self-interest, if you let people try to manufacture and sell products and services that a mass of people want, you will never need to bail them out. But if you let liberals in charge of everything, and you put obstacles and regulations and taxes in front of innovators and risk-takers, and if they fail because of it, you’re either gonna let ’em fail and feel bad, or you’re gonna have a call to bail them out. And we know that the moneychangers, power brokers, whoever, the people that run Washington and have access to that money are gonna bail out their friends first. And that’s not you and me.

But if you just let capitalism take hold, you don’t need TARP. And capitalism has a very functional aspect to it. Businesses fail, the result of people doing something they shouldn’t be doing, doing it in a bad way, making a mistake, it’s the result of people not wanting the product or not wanting a service. It fails. It fails, you go back, you try it again, try to get it right. Some succeed. Well, where we are right now is the people that succeed are suspects. The people that succeed are somehow villains. And the people that fail are the ones who are virtuous. The people that fail are the ones who have been taken advantage of, who have been screwed, who have been ripped off. No. They’re just not as good. So we’re gonna end up propping up mediocrity rather than encouraging excellence in everybody. And then you need TARP. And then you need stimulus. And then you need bailouts, because it makes everybody feel better and it’s fair. But you don’t have capitalism when all that’s going on.

Now, why is this happening on the Republican side? I’ll tell you exactly why it’s happening. This is how Romney hopes to win. This is the end result of a strategy. Mitt Romney has spent a fortune in two election cycles attacking the records of people who are more conservative than he is, by claiming they are not conservative, and he’s attacking them from the right. Now, what outrages Newt and the others in the past, the people back in 2008, is that Romney is not Mr. Conservative, but he’s positioning himself that way and attacking others for not being. Newt, I guarantee you, if you ask him, Newt thinks he’s twice the conservative Romney is. So here’s Newt being hit up and ripped for not being conservative by a guy he doesn’t think is anywhere as big a conservative as he is.

Imagine if you were on the end of millions of dollars of attack ads and opposition research, and you think all of it’s a bunch of lies, what are you gonna do? You’re gonna try to retaliate. So that’s where we are. This campaign is where it is because decisions were made by certain candidates to take it here. So it has to be dealt with as is.

BREAK TRANSCRIPT

RUSH: Now, speaking of TARP, Newt, he really nailed it in his Human Events piece 2008, October 1st. Let me give you a brief excerpt of what Newt wrote then. He said, “The TARP plan that relies on the former chairman of Goldman Sachs –” that would be Paulson “– presiding over disbursing hundreds of billions of dollars to Wall Street is a terrible concept and inevitably will lead to crony capitalism and the appearance of — if not the actual existence of — corruption.”